Participant

Approaching Retirement

If you’re a decade or so away from retiring, you’ve probably spent at least some time thinking about this major life change. Some important life factors to consider are:

  • Reassess your living expenses
  • All your income sources
  • Pay off debt, powerup your savings
  • Manage taxes
  • Account for health care

 

Changing Jobs

If you have lost your job, or are changing jobs, you may be wondering what to do with your 401k Plan account. It is important to understand your options. Here at Capital Analysts of New England we can provide you with information to ensure you are making the best choice with your 401k Plan.

If you leave your job (voluntarily or involuntarily), you’ll be entitled to a distribution of your vested balance. Your vested balance always includes your own contributions (pre-tax, after-tax, and Roth) and typically any investment earnings on those amounts. It also includes employer contribution (and earnings) that have satisfied your plan’s vesting schedule.

The biggest question we may be able to answer for you is if you should rollover to your new employers 401k plan or to an IRA. Assuming both options are available to you, there is no right or wrong answer to the question. We will help you weigh all your factors, and help make a decision based on your own needs and priorities.

 

Roth 401k Plans

A Roth 401k is simply a traditional 401k plan that accepts Roth 401k contributions. These are made on an after-tax basis, just like Roth IRA contributions. This means there’s no up-front tax benefit, but if certain conditions are met, your Roth 401k contributions and all accumulated investment earnings on those contributions are free of federal income tax when distributed from the plan. Our advisors can help you determine how much you can contribute to your Roth 401k Plan as every individual’s circumstance is unique.

 

Choosing a Beneficiary

Selecting beneficiaries for retirement benefits is different from choosing beneficiaries for other assets such as life insurance. With retirement benefits, you need to know the impact of income tax and estate tax laws in order to select the right beneficiaries. Although taxes shouldn't be the sole determining factor in naming your beneficiaries, ignoring the impact of taxes could lead you to make an incorrect choice.

In addition, if you're married, beneficiary designations may affect the size of minimum required distributions to you from your IRAs and retirement plans while you're alive.

Some important factors to consider are:

  • Paying income tax on most retirement distributions
  • Naming or changing beneficiaries
  • Designating primary and secondary beneficiaries
  • Having multiple beneficiaries
  • Avoiding gaps or naming your estate as a beneficiary
  • Naming your spouse, other individuals, a trust, or a charity as a beneficiary

 

Estimating your Retirement Income Needs

It can be hard to know where to start when planning for your retirement. One of your first steps should be to estimate how much income you’ll need to fund your retirement. It is not as easy as it sounds because retirement planning is not an exact science.  Each individual is different and at Capital Analysis of New England we can help make a plan based on your personal goals.

We can help estimate:

  • Your current income
  • Your retirement expenses
  • When to retire
  • Your source of retirement income
  • Any income shortfall

Our advisors will do their best to properly prepare you to maximize your savings, build more wealth, create an income streak, and help protect you from the unexpected.

 

Required Minimum Distributions

A RMD is the required minimum distribution that you must take out of your account once you reach the retirement age of 73 or retire. Our advisors will be able to help you consider personal circumstances, identify all retirement accounts subject to RMDs, how much you’ll need to liquidate to meet the requirement, how you will accept the funds and possible investment options.